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PIC CEO will know his fate by end of the week, says Nene

Jul 23 2018 15:38
Khulekani Magubane

Dan Matjila will know his fate by the end of the week, as Minister of Finance Nhlanhla Nene announced on Monday that he had completed his review of evidence and allegations against the Public Investment Corporation and its CEO.

Matjila has, in recent weeks, been sucked into a storm of impropriety allegations, particularly from United Democratic Movement leader Bantu Holomisa. However, while Matjila has rejected allegations and the Public Service Association defended him, the matter escalated to Treasury.

In a statement released by National Treasury, Nene said he would soon announce the decisive steps aimed at addressing the PIC’s governance issues and allegations against the PIC CEO before the end of this week. He said this would happen after he meets with the PIC’s board of directors.

“Once this is done, and the entity lives up to expectations, the shareholder ministry should have no business second-guessing decisions by the board, so long as these decisions are in line with the mandate of the public institution and in keeping with the compact the board of directors entered into with the shareholder ministry,” said Nene.

Nene said his approach to the oversight of state-owned entities remained that the shareholder ministry should ensure that a board of directors and management with the requisite skills and experience are appointed.

“Indeed, it is the meddling in the affairs of state-owned entities, the second-guessing of the decisions of the governance structures of these entities, and failure to adhere to good governance practices, that have contributed to the mismanagement of state-owned entities and enabled the malfeasance that we have seen,” Nene said.

Nene said he believed that the measures that he will announce this week will strengthen the PIC’s governance and restore public trust in this important public institution as the largest investment arm on the continent.

“I am mindful that some in our society believe that I have taken longer to deal with the PIC matters. However, the need for transparency and accountability in dealing with state-owned entities must be balanced against the need to follow due process and ensure that proper governance is observed,” he said.

Nene earlier this month said he was opposing the UDM's demand to immediately suspend Matjila.

The UDM on June 15 asked a court to direct Nene to suspend Matjila, bar the PIC’s board from taking decisions on removing or disciplining the CEO, and instead make this the minister’s responsibility. The UDM’s request follows accusations that Matjila used PIC funds to support the business of a woman with whom he was romantically involved - claims the CEO has denied.

The “invitation to the court to usurp the minister’s powers” isn’t congruent with the constitution because “the facts do not call for such a drastic remedy and doing so would be a breach of the principle of separation of powers,” Nene said in an affidavit dated July 2.

He said he had engaged “multiple stakeholders” on the governance issues at the PIC, including the allegations against the CEO.

The PIC, which manages state workers’ pension funds, handles more than R1.9trn ($144bn) of assets. 

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